Sirius, XM settle with FCC over violations
Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. agreed to pay $19.7 million to resolve outstanding violations involving some of their radios and transmitters, clearing what appeared to be the final obstacle to regulatory approval of their long-pending $3.9-billion merger, a top federal official said Thursday.
“I’m optimistic that now we got this issue out of the way we can move forward with an approval,” said Kevin J. Martin, chairman of the Federal Communications Commission.
Resolving the violations was a priority of Republican FCC Commissioner Deborah Taylor Tate, the swing vote on the five-member panel and the only commissioner who has yet to make a decision on the merger. Martin and fellow Republican Robert M. McDowell have voted for the merger. Democrats Jonathan S. Adelstein and Michael J. Copps have voted against it.
Sirius and XM confirmed that they were working with the FCC to settle “outstanding enforcement matters.”
Martin said XM agreed to pay $17.5 million and Sirius $2.2 million for unauthorized ground-based repeater transmitters and radios that exceeded power limits. XM agreed to a much larger figure because it continued to operate hundreds of unauthorized repeaters dating to 2006 as it sought FCC approval. Ground-based repeaters help transmit the satellite signal, and their location must be authorized by the FCC because they can cause interference with broadcast stations and wireless broadband services.
“That’s a significant violation of our rules,” Martin said. Sirius has shut down its unauthorized transmitters.
After shares in both companies jumped more than 10% on Wednesday amid reports that merger approval was close, investors reacted negatively to news of the payments. Sirius shares were down 26 cents, or 9.7%, to $2.42, and XM dropped 34 cents, or 3.4%, to $9.70.
Broadcasters have made the violations part of their aggressive campaign to persuade regulators to deny the merger, which the Justice Department approved in March. Martin announced his support last month after Sirius and XM agreed to several conditions, including freezing subscription rates for three years, offering cheaper packages of stations and allocating 4% of their channels for noncommercial and minority programming.
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